Will Tech Titans' PAC Harm Silicon Valley's Brand?

Richard Waters and Anna Fifield

Wednesday, 10 Apr 2013 | 12:25 PM ETFinancial Times

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Harriet Taylor | CNBC

Mark Zuckerberg speaks with the media after launching a new Facebook mobile phone platform.

It is said to have a $1 million joining fee and boasts some of technology's biggest names among its members – including its founder, Facebook's Mark Zuckerberg. But Silicon Valley's latest attempt to form a lobbying group has been attacked by rivals in the tech sector as an interference in politics that risks attracting negative publicity.

The new organization, to be formally launched in the next few days, marks the first major super-Pac – or political action group – to emerge from the tech industry. Starting out with what insiders estimate will be $20m-$25 million in seed money from Mr. Zuckerberg, it is set to become Silicon Valley's richest lobby group, with a total fundraising target of $50 million.

As its first cause, the as-yet unnamed alliance has taken up immigration reform in order to boost the flow of engineers and other skilled workers to the United States.

But critics at tech companies not involved in the group warn that it risks drawing negative attention to the extreme wealth of some of its backers as well as attracting the sort of accusations of arrogance and naivety that have accompanied some earlier Silicon Valley attempts to shape policy debates in Washington.

The grouping aims to bring together some of the industry's richest entrepreneurs, who have been asked to give at least $1 million in order to join – though a person close to the fledgling lobby group said that figure was flexible. It has won backing mainly from members of the latest generation of consumer internet companies, including Reid Hoffman of LinkedIn and Mark Pincus of Zynga.

Traditional tech industry powers with a longer history of lobbing in Washington, like Cisco, Oracle and Intel, as well as established internet companies like Google, are not yet involved.

Throwing the wealth of some of its most visible names behind controversial political issues such as immigration reform could provoke a backlash, some experience tech industry policy experts warned. "Super-Pacs are a toxic brand," said one executive not involved in the group.

Furthermore, the super-Pac has picked a difficult challenge for its first campaign, lobbyists and Washington insiders say. Bipartisan groups in both the Senate and the House are putting the finishing touches on their respective bills, leaving little scope for influence. The Senate's "gang of eight" is expected to unveil its long-awaited draft bill as soon as Thursday.

"Everyone is coming to the table with their views already formed," said one veteran tech industry lobbyist.

The draft Senate bill contains a pathway to citizenship for the 11 million unauthorized immigrants in the United States, as well as measures for improving border security. It would also overhaul the system for issuing visas to low-skilled workers, and dramatically increase the number of visas available for high-skilled workers in the science, technology, engineering and math (Stem) fields.

This has been an issue of particular interest for tech companies, with everyone from Microsoft and Intel to start-up entrepreneurs calling for more Stem visas and for a better system for allowing people who graduate from American universities with advanced degrees to remain in the US.

Also, with a direct interest in only a narrow part of the debate – how many high-skilled workers should be allowed into the United States – the tech lobby would find it hard to shape the political consensus around an issue with much broader ramifications, this person said.

Added to the controversy, Joe Green, a former Harvard roommate of Mr. Zuckerberg, who heads the new group, was forced to backtrack last week after a memo about his organization's aims was leaked to the website Politico. In the memo, Mr. Green claimed that some of the tech industry's most influential figures would swing their companies' networks behind the group's causes, bringing massive influence by mobilizing a mass online audience.

However, supporters predicted the group would indeed have an immediate impact on national issues. "They have real money," said one advocate of innovation reform. "They are having trouble getting to $50 million, but even starting with $20 million they are in a good place."

Jim Manley, a former senior aide to Harry Reid, the Democratic leader of the Senate, said that Mr. Zuckerberg was being "smart" in hiring people from both sides of the political divide.

The group has hired Rob Jesmer, previously executive director of the National Republican Senatorial Committee, as campaign manager and Terry Nelson, a Republican strategist who helped run the 2004 Bush/Cheney presidential campaign. It has also signed up Joe Lockhart, the former Clinton administration spokesman who was vice-president of global communications at Facebook until recently.

However, Mr. Manley warned that the group would have to tread carefully. "Immigration is still a very controversial social issue so if they don't play it right, they are going to get wrapped up in the controversy," Mr. Manley said. "So this is not without risk."

Rather than trying to have an impact on content, the group appears to be focusing on convincing lawmakers to support the bills as they proceed through Congress.

"There is a role that they can play in the immigration debate and there are a lot of groups working together," said Jeremy Robbins, director of the Partnership for a New American Economy, the pro-immigration group of New York mayor Michael Bloomberg, which is also agitating for comprehensive reform.

Fierce rivalries between some of the sector's biggest names have stymied previous attempts at presenting a unified front in Washington. TechNet, an industry alliance formed at the height of the dotcom bubble with plans to spend heavily to back its agenda, later had to narrow its ambitions. More recently, The Internet Association, a new forum for companies to promote common policy issues, has been held back by disagreements among its members, according to people involved in the alliance.